USD consolidates

US-China trade talks should be behind.

German - US 2Y Spread at new low

Whereas EUR/USD off the low.

USD MACD Divergence

Various USD instruments exhibit MACD divergence particularly on 4h charts that could be a sign of some sort of USD correction ahead, as these setups could trigger bottom/top fishing trades.

EUR/USD which trades at a strong resistance:

Also 1h

USD/JPY 4h

GOLD 4h

The Euro is making new highs as Dollar is loosing ground

Dollar declined against the Euro in the last eight days and the trend seems to continue this morning as well. The Euro was the biggest beneficiary of the USD weakness. It has broken the 1.1100 level in the Asian session. The next strong resistance is around 1.1500.

The Pound is range-bound between 1.2850 and 1.3000.

AUD retraced the 0.7450 level.

Kiwi is still struggling near the 0.6850 major resistance,

JPY is nearing the 112.00 major resistance,

CAD is also at a major resistance around 1.3600. The oil rally helped the loonie, but given the Dollar overall weakness and the oil rally in the last few days the technical picture doesn't seem to be very impressive for the bears.

SGD is also nearing major resistance.

It seems it is just too many resistances now that might suggest a potential USD correction.

NAFTA, BOJ, ECB, Economic Data

It is gonna be a busy day.

Overnight NAFTA news moved CAD and MXN as WH announced: "President Trump agreed not to terminate NAFTA at this time". It is very generous indeed... CAD huge bearish engulfing at a major resistance:

BOJ leaves monetary policy unchanged, boosts outlook for Japan economy. JPY did not move on this.

ECB meeting and the press conference could be more interesting. There is an upside risk to EUR if Draghi mentions ending asset purchases in his press conference. Chart technicals are a bit complicated as usual. We have a gap to fill at major resistance after a double top and a 4h bullish engulfing.

Equity indices exhibit reversal patterns especially SP500 at or near major resistance levels.

USD: Daily bullish engulfing at a major resistance suggests a reversal

Dollar selloff continues

Healthcare bill failure sent DX to mid November level erasing the Trump trade gains.

GDB is heading to a potential short squeeze. The 1.3000 area could be very important as a good place for long term stops.

JPY with Gold are the biggest gainers as risk-off sentiment also builds up. 107.50 is the next strong support for the Yen.

Junker hints a hard Brexit scenario, RBA meeting minutes

Junker: "No. Britain's example will make everyone realise that it's not worth leaving."He added: "On the contrary, the remaining member states will fall in love with each other again and renew their vows with the European Union."

I read this as a sign that the EU want to create precedent with UK. This clearly could fuel hard Brexit expectations. EUR strengthened against the GBP, but the move did not seem to be decisive.

RBA meeting minutes:
- build-up of risks in the housing market
- weak wage growth

- rising AUD would complicate economic transition

- Higher commodity prices could last longer than first thought given firmer global demand

AUD is a major resistance now:

NZD Credit Card Spending y/y:

Intraday V-Turn of the Dollar

Yesterday the the USD made fierce V-Turn that wasn't really supported by any news. Yellen's second day testimony int he Congress was underway, but she made no such comment that could have underpinned the move. Technically it could be just the retest of the DX breakout at 101.00

The bearish view could be that the recent rally was just the 50% retracement of the pullback from the 103.75 high. Although the bullish case is more compelling, especially on higher timeframe. After a double bottom and a trendline break the bullish trend seems to be intact.

More facts on Brexit and many CPI data release next week

There were two events last week that had meaningful impact on markets:
- Trump news conference and 
- US retail sales.
Nether of them offered some clear guidance, though both of them moved the USD. Trump speech resulted in USD weakening as market expected some more facts from president elect.

Retail sales was not so impressive, though it first helped the USD. Later on the USD gave back most of the gains. 

The key event next week will be May's Brexit speech in the Parliament. I suspect it would be  rather on the hard side that could lift the USD as risk aversion could prevail, but should have the biggest impact on GBP and EUR. GDP, USD and CAD CPI data will be released. Market is very much focused on the CPI figures, so especially the USD data will be important. BOC and ECB meet next week. On Friday Chinese GDP data will be released.

Equities
Equities do not seem to care about anything as they march higher. Technically the picture is mixed. There is a massive MACD divergence everywhere as the Trump rally entered into a consolidation phase.

The Nasdaq and the DAX both made some kind of breakout both with a very week follow through. I would refrain from looking any short opportunities here. Technically Nasdaq looks the strongest so I will look for long opportunities there, but scalp rather swing my trades. 

AUD/USD
Aussie is at a major resistance.

There are two forces (that are strongly interconnected) that move now the AUD:
- recovering commodity prices
- easing worries about Chinese hard lending.

Commodity prices are reflected in the strong Chinese PPI data released earlier.

The Chinese GDP is seemingly stabilizing at the 6.7% level.

USD/CAD
We are at the confluence of the long term trend line and the DEC low resistance that held so far.  

Gold
The Gold is retesting the 1,200 area which is a major resistance.